Saturday 29 January 2011 19.02 EST
First published on Saturday 29 January 2011 19.02 EST

So the BBC is slimming down, in response to government pressure. The World Service is to lose five of its foreign-language services, and a quarter of its staff. And BBC Online's budget will be cut by a quarter to £103m and the unit will lose 360 staff, at the same time as it embarks upon a radical "redesign" of the website and its navigation. Introducing these developments, the corporation's director general explained that the hatchet-work was part of a broader strategy to do "fewer things better". The changes to BBC Online would, he maintained, make the corporation's web services "more focused and more valuable".

What links these two victims of corporate surgery? Answer: they're not television. And that's highly significant. What the cuts to BBC Online signify is that the internal battle within the corporation between the few who understood that push media represent the past, and the many who think that the Wibbly Wobbly Web (as Terry Wogan used to call Tim Berners-Lee's invention) is really just the newest way to convey visual stimuli to couch potatoes, is over. And the past has won.

I was a TV critic for 13 years in the 1980s and 90s, and at that time knew the industry pretty well. What always struck me about its senior executives – in both the commercial and public sector – was how smug and self-satisfied they seemed. In a way, this was understandable: they were masters of a particular universe, rulers of a medium that dominated the information ecosystem, dictated the political agenda, and determined the daily habits of a large chunk of the population. At that time, the most powerful apparatchiks in the BBC and ITV were the schedulers – the planners who designed ways of holding the attention of a mass audience. Their craft included tricks like not scheduling some things against stronger competitors; making sure that one had a follow-on that would keep audiences from switching channels over the 9pm watershed; winning the ratings war over the Christmas period and so on. Watching them at work, one realised that effectively they were playing chess – and that the pawns in their arcane games were the viewers.

Embedded in the corporate DNA of push media like broadcast television is the assumption that viewers are, if not exactly idiots, then passive consumers. The deal is that they receive gratefully what we, the broadcasters, decide to create. The couch potato is thus the paradigmatic product of broadcast television. So you can see why television executives were so puzzled by the web, and particularly by the rise in user-generated content like blogs or YouTube videos: to them, the idea of such content is an oxymoron, like "military intelligence". Viewers aren't creative, and even if they were, there's no way anyone would let them publish their crap.

Left to its own devices, therefore, the BBC would probably have missed the internet, just as Microsoft nearly did. In fact, one of the few good things to be said about John Birt's tenure of office as director general is that he understood the significance of the network and forced the corporation to engage with it. But even as he did so, most of his colleagues (not to mention at least one BBC chairman) regarded BBC Online as the equivalent of putting flags on the moon.

Yet the strange thing was that, even in this hostile atmosphere, BBC Online flourished. It did that by being properly funded and by attracting some talented people who were motivated by the public-service mission and the opportunities for innovation offered by an organisation that did not have shareholders demanding instant returns. The result was an impressive set of innovations, one of which – the iPlayer – has transformed the online landscape.

But the biggest achievement of BBC Online has been to ensure that the BBC is by far the most significant UK player in the global online entertainment market. For example, bbc.co.uk is the second most popular entertainment site in the UK (second only to YouTube), and with 35-40m unique visitors a month is one of the top five news sites in the world, according to the web-metrics firm, Nielsen.

None of this has stopped the push-media folks in the BBC from resenting the online cuckoo that has disrupted the nest. The departure of Eric Huggers, the corporation's director of future media and technology, to spend more time with the $3m a year that Intel will be paying him, gives them a providential opportunity to get the online operation back under adult supervision. And what better way to start than with a round of bracing cuts?

The BBC needs to spend more, not less, on its online operation if it is to have a chance of being relevant in 20 years' time. It needs to do more innovation, not less, in technologies beyond the iPlayer. And, given that its top management apparently still doesn't "get" the net, it badly needs a new chairman who does.